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Renewable Energy Projects

Volume 513: debated on Wednesday 14 July 2010

I am grateful for the opportunity to debate this important issue, and for the support of colleagues who are in attendance. My basic case is that if we in this country are serious about tackling climate change, we have to get serious about increasing the amount of energy and electricity that we consume from renewable sources.

We face a familiar problem, which has been too familiar over recent years: too often, renewable energy projects have failed to get off the ground and to receive planning consent. Local people and local communities have felt disengaged from projects that they thought were being imposed on them and, as a result, far too often we have ended up with inappropriate sites or with projects not getting through the morass of the planning process. We have to find an acceptable way to change the balance, so that we can increase the number of renewables projects that gain consent in an area and get genuine local community buy-in to renewable energy.

I welcome some elements of the new Government’s programme, including the wholesale theft, if I may call it that, of my party’s manifesto pledge to empower local authorities—councils—to generate electricity from renewable sources. The Minister will know better than I do, from his brief experience of coalition Government, that it involves a little bit of give and take, but I had not realised that it would involve taking wholesale from Labour’s programme. But let us face it, after we lost the election we were not in a position to implement that pledge any time soon, so it was good that the Government took it up.

I hope that the Minister will tell us more about the Government’s interesting plans on business rates, with the potential for giving a reward, in effect, to local people who agree to renewable energy projects. We look forward to hearing more about whether the green investment bank will make a real difference and whether it is to be more than just a Budget item included to give the appearance of doing something.

It is also important for the Minister to set out how the Government envisage resolving any tension that might arise locally between local communities, which have been empowered to advance proposals for renewable energy, particularly through co-operatives, and local authorities that are allowed to bring forward proposals for local energy generation as a source of revenue production.

My hon. Friend has hit on a key point. There has to be a way to manage that tension. I will say more about co-operative energy solutions. A local authority’s laudable objective must not crowd out the only way that we can get to the root of the problem. There can be a huge gulf between our objective to obtain more energy from renewable sources and the inability or unwillingness to agree locally.

I agree with all the points that my hon. Friend has made. Does he agree that planning is at the centre of some of the problems relating to the tensions between local authorities and co-operative groups in respect of renewable energy projects? One way to redress the balance is to encourage more local authorities to regard community ownership positively in terms of giving planning consent, allowing them to support such a co-operative movement without crowding it out.

My hon. Friend is right. We need to explore that key area. I will say a little bit more about that later.

I am proud to be the first Labour/Co-operative Member of Parliament for Barrow and Furness; although by no means its first Labour Member, I am the first Co-op-sponsored MP. It is appropriate to mention that during this debate, because community ownership is the most effective way for us to enable local communities to have a genuine stake in vital projects, the number of which we need to increase.

If the Government’s commitment to the big society becomes more than an idea that is yet to be defined—I will not say “ill-defined” because that would be uncharitable—I hope that they will wholeheartedly embrace this area and do more than just give words of support.

My hon. Friend has made some good points. When I was lucky enough to be a Minister, some excellent civil servants worked for me, but only a small handful of them really had an understanding of and a grip on the co-operative and mutual movement. Could not the Minister usefully direct some of the staff of energy regulators, and more staff in his Department—other than those who have probably faced a steep learning curve helping him prepare for this debate—to visit community energy mutuals, such as the Baywind co-operative in the Lake district?

My hon. Friend is right. I need no encouragement to agree with anyone who suggests a visit to my constituency of Barrow and Furness, which is always a fantastic idea, and particularly the Baywind energy project, which prompted me to call for this debate. I am sure the Minister is aware that Baywind has blazed a trail since the mid-1990s. The Baywind wind turbines in my constituency, which are part of a co-operatively owned energy project, have changed people’s understanding of renewable energy and of the capacity of a local area to have a genuine stake in that form of energy.

My hon. Friend talks about the benefit that communities realise from community renewable projects. I am sure that he is aware that there are good examples of that in Scotland, for example, in Fintry and on the island of Gigha. It has become clear that the lack of available funding is a stumbling block for community renewable developments. Is he aware of the studies being carried out by the Scottish agricultural college on a loan scheme for renewable energy projects, including community ones, which may help get over that initial problem, to develop more community renewable energy projects throughout the country?

I thank my hon. Friend for making that important point.

My hon. Friends have mentioned practical ideas as to how Government can help support such vital projects, potentially facilitating loans, and so on. Baywind is an example of a local community-owned project succeeding, which happens all too infrequently at the moment. I hope that the Government will consider seriously their lack of co-ordination in a difficult and complicated field.

Does my hon. Friend agree that we could learn some interesting lessons from Denmark, and how it has used the tax system to encourage community ownership of renewable energy projects and incentives, and to encourage people to participate in and support them at local level?

Absolutely. We all recognise that money is tight throughout the country. The Government do not hesitate to paint a far more drastic picture than is the case, but we must find a way of breaking the deadlock. The importance of doing so is not simply to tackle climate change, fundamental though that is, but to ensure a greater level of energy security. Renewable energy projects can contribute not only to moving away from fossil fuels and the rising cost that will be tagged to such fuels in coming years, but to increasing energy security for the UK.

Stroud, which the Minister has already visited, is awash with good ideas for renewable energy. I want to focus on micro-hydro schemes, because some obstacles must be removed, including possible objections by the Environment Agency. We must discuss that, and I have mentioned it in the House.

Social enterprises are important to provide traction for ideas, and plenty of information exists about them. Many people in Stroud know about them, and many people throughout the country should know about them. The previous Labour Government set out some interesting ideas about that and various mechanisms. A key point—

The hon. Gentleman is right to make that point, and to indicate the variety of renewable energy schemes that we must embrace. The issue is not just about onshore wind or offshore wind. The potential for hydropower is enormous in the UK at both micro level and a wider level. I was an adviser in the Department for Business, Innovation and Skills under the previous Government, which kicked off the study into the Severn barrage, but that is a subject for another debate. I will not take interventions on that, but it is crucial.

Community-owned schemes may make a difference because they engender a level of buy-in from the community. Baywind has paid a dividend to local residents who have bought into the scheme since its inception in 1996. As an educational establishment, it accepts regular visits from local schoolchildren and adults, and promotes the cause of renewable energy. The key point for onshore wind is that community ownership of the turbines has allowed the co-operative to avoid the controversy that has often surrounded turbines in other areas of the Cumbrian hills in my patch.

I will be brief, Mr Hood. This Government are paving the way for communities to become involved in all sorts of renewables by returning business rates back to the community, and that is something to embrace. Does the hon. Gentleman agree?

I made the point at the beginning that the scheme is interesting and welcome, and it is a contribution, but it does not go to the heart of the matter and that incentive will not tackle the problem. I will come on to the barriers facing co-operatives such as Baywind and local communities that want to establish their own energy supply.

I turn to the planning system. Energy4All is a not-for-profit organisation to facilitate community-owned renewable energy schemes such as Baywind. It may cost communities £150,000 simply to be part of the planning process, and at the moment they cannot be confident of success in navigating through that process. The coalition programme for government states explicitly that the Government

“will encourage community-owned renewable energy schemes where local people benefit from the power produced.”

That is in addition to the pledge on business rates.

As my hon. Friends said, local authorities should encourage community ownership, but at the moment we just ask them nicely to do so. Will the Minister consider ways of giving genuine preference in the planning system to community-owned projects? There must be safeguards, but community-owned schemes already show local buy-in, and we could greatly slim down the cost of the planning process by streamlining it to recognise that the ownership model has already achieved a level of community buy-in.

The Co-operative party has called for creation of a community energy and climate change unit, based on the successful Supporters Direct model, which promotes mutual ownership of football clubs. The core functions of the unit would be to bring together silo working in government. We are all guilty of that when in government; it is not a new phenomenon of the new Government. The unit would be able to give advice on legal structures, financial assistance, business planning and the regulatory framework, but it would not be prescriptive. There are many ways to skin a cat, and I hope that the Minister will recognise that there is a cat to be skinned, and will come up with some suggestions for his preferred method of doing so.

One way of making start-up costs easier for community projects—the model has been identified by Energy4All—is to encourage residents not necessarily to go for full ownership of a project, but to take a part-stake in commercial developers’ wind farms. In that system, the developer identifies the project and takes the risk, and the community simply buys a stake. The developer gains from improved community relations, and the community gains a direct stake in a project in its locality. However, there is currently little or no take-up of that opportunity, so we should all consider ways—I am interested in the Minister’s views on this—of giving developers a push and changing the culture of communities and commercial developers. Planning incentives may help, as long as there are proper safeguards.

Even under the current timetable, National Energy Action estimates that there are close to 5.4 million people in Britain—one in every five households—who are classed as fuel poor. Currently, we cannot say that renewables are a cheap form of energy. However, the previous Government’s proposals for micro-delivery and for local areas to come together in co-operatives could drive down the cost and make renewables more cost-effective. That was a key part of my party’s manifesto, and I hope the Minister will say that he will take up that proposal.

In the context of rising fuel poverty and the need for urgent action to reduce carbon emissions, the UK needs a major improvement in domestic energy policy and the way renewables are delivered. I recognise that that would require a culture change and that it is not simply about the Government, but I hope that in his response, the Minister will recognise the role of the Government in empowering communities. At their best, communities can do better than any Government or state organisation by taking direct control of the means through which they power their homes and making a direct contribution to lowering carbon emissions. In their own way—and this is what we all individually want to do—communities can tackle one of the greatest challenges that we will face over the coming years and decades, both for our country and for the world.

I shall start by congratulating the hon. Member for Barrow and Furness (John Woodcock) on an excellent speech. Although he is a new Member, I know that he is not new to Westminster and the processes of government. He brought the experiences that he gained working behind the scenes to the fore with great aplomb, and I found his contribution helpful and useful.

It is encouraging to see that several new Members are present, even if they have participated only by way of interventions. I hope that the positive dialogue engendered in Westminster Hall debates can continue. We do not claim to have the monopoly on wisdom; this is a new agenda. I am a new Minister and I am sure only that we need to be ambitious and radical, and that pottering along under the status quo is not an option. Together with my officials, I am looking at a range of options. If other hon. Members, regardless of whether they are part of the coalition Government or in opposition, come forward with positive contributions—particularly examples of successes in their own constituencies, such as Baywind—we should look at those contributions.

I am pleased to tell the hon. Gentleman that my officials will shortly be meeting Energy4All to discuss some ideas. Those ideas will incorporate five different ownership models: the community co-operative model, which enables 100% ownership of an entire project; the shared ownership model, where a co-operative owns one or more of the turbines on a wind farm, with the remainder being owned by a landowner, private developer or a community trust; the royalty instrument model, which is where a developer builds a wind farm in a region and the community purchases a stake in the future revenue of the project through a co-operative; the regional co-operative model, where finance is raised through a national or regional energy co-operative covering a wide geographic area and a range of different projects; and the loan model, where the community project may approach an existing energy co-operative and obtain a simple loan to get a new project off the ground. Those are some of the innovative ideas that are springing up, and we need more of them.

I have taken a personal interest in the decentralised energy agenda since 2005 when I first started shadowing the environment brief. It became clear that there were many advantages to decentralised energy, not only in the way that it can contribute to the decarbonising of our energy supply, but also in the security of our domestic energy supply and the sense of ownership and empowerment that it can bring to local communities and consumers. Politically, there is a huge power in the broadest sense of the word—pardon the pun—in that agenda. It is one of the few things on the energy agenda that engages local people in a way that they can understand and in which they can participate.

When the hon. Gentleman introduced this debate, he was right to say that there were problems and that, historically, there has been resistance to renewable energy projects in all of our constituencies. Some of that resistance was well based, but often it was based on misconceptions. It is difficult to blame local communities for resisting renewable energy because often they are asked to have something imposed on them that spoils their view or the amenity of the local land, and brings them no benefit whatsoever. If we are to see an increase in the number of such installations, we need a more equitable settlement. We need a greater sense of community participation both in decisions about where the installations are to be sited, and in the returns that flow from them. There are potentially remunerative streams of profit to be gained under those arrangements, and it is right for the communities that host renewable energy sources to benefit in that way.

Our coalition programme is clear. We plan to help communities become more self-sufficient in the way that they use heat and power. The programme also makes clear our plans to encourage more community ownership of renewable energy. Vision, localism and decentralised energy all empower communities.

We have a range of technologies. We have spoken about wind, particularly onshore wind, but a host of other exciting technologies such as micro-hydro power are available, and we should do more to advance them. There is also biomass, solar power and combined heat and power. Ultimately, I would like to see the notion of local energy economies widely accepted. People have got used to the notion of a local food economy. We have seen local farmers markets spring up, and links between local schools and community projects, and local food producers, farmers and retailers. We must do more to encourage the notion of local energy economies, where people see a closer link between the energy that local communities consume, and the way it is produced.

In my constituency, I have encouraged a greater link between farmers who have woodland that is not in productive use, and a local school that is putting in a woodchip CHP boiler. A local farmer will bring woodland back into productive use so as to supply that boiler on a long-term contract. Coppicing is better for biodiversity and flora and fauna.

I appreciate what the Minister is saying. Does he share my sadness at the decision to cancel the wind turbine as part of the Olympics park in the borough of Waltham Forest? That could have been the legacy of a local renewable energy co-operative in Waltham Forest. Will he commit to working with me to look at alternatives such as biomass and photovoltaic cells, and see whether they could be the start of such a co-operative project in Waltham Forest?

I am not familiar with that project or with the reasons behind the cancellation of the wind turbine. However, I would be happy to work with the hon. Lady to try and encourage the uptake of other renewable energy sources. That is absolutely key, and we want the Olympics to be the greenest Olympics ever, just as we want the Government to be the greenest Government ever.

Community ownership is a key part of our localism agenda. In the common themes and principles that bind the coalition together, localism, concern for the environment and action on climate change are three of the most powerful issues that drive our agenda. We are determined to create the right framework for building a low-carbon economy. We realise that we need to make game-changing interventions to increase energy efficiency in local communities. That is why at the heart of the energy Bill that I hope to introduce in the autumn sits the green deal, which will transform homes in all our constituencies. If we are to save consumers money on their energy bills but also make their homes more efficient and reach our carbon reduction goals, we will need game-changing policies such as the green deal, but we also need a game change in our culture and our approach to community ownership.

We are already working on measures to ensure that communities can benefit from renewable energy, taking advantage of incentives provided by feed-in tariffs, but we will go further and encourage more community ownership of renewable energy. The hon. Member for Barrow and Furness made excellent points about the fact that where there is community ownership of energy installations, many of the objections in the planning system will simply fall away. I cannot comment directly, but I do hear the points that he makes about the need for that to be recognised in the planning system itself. There is a virtuous circle here. Part of the reason why there are so many delays to many local projects is that there are so many local objections. If there are fewer local objections, there will be fewer delays. In an ideal world, we would not have to tinker greatly with the planning system, because it would be self-fulfilling, but we are examining ways in which we can work with the planning system to give communities more power to shape the places that they inhabit.

The coalition agreement made clear our intention to publish and present to Parliament a simple and consolidated national planning framework covering all forms of development. That should include local community-owned installations. My Department is working with the Department for Communities and Local Government on extending permitted development rights for both domestic and non-domestic microgeneration technologies.

We are also developing a website, called community energy online, to develop best practice and to support local authorities and community groups in developing their own renewable energy. Often, the greatest spur to that is not just what we can do at Westminster, but clear examples of action being taken in the community, out there in the real world. The more that we can spread that best practice and knowledge, the better.

I have a few more points, which I shall run through quickly in the time remaining. First, I shall say a few words about overturning the ban on local authorities selling electricity. It was nonsense that the Local Government (Miscellaneous Provisions) Act 1976, introduced by a Labour Government, prevented councils from selling electricity from local wind turbines—not that there were many in those days—or from any form of local generation or, indeed, from anaerobic digestion, which we are also keen to promote in the coalition agreement. I hope that by the end of the year, local authorities will be able to sell electricity from renewables, generating revenue to help local services and keep council tax down. That will see local communities truly benefiting from the low-carbon transition. It will allow local authorities to take full advantage of the incentives available through feed-in tariffs to invest in renewable energy in their own buildings. We are also keen for local authorities to work with other partners on community-scale renewable electricity schemes that can be supported by FITs.

At this stage of renewable development, I am not as worried as the hon. Gentleman about crowding out different initiatives, because we are at such an early stage. One of the mechanisms that we see as key to encouraging local community schemes is the retention of business rates. As the coalition programme for government made clear, we will allow communities that host renewable energy projects to keep the additional business rates that they generate. We are working up plans to make that a reality.

Overall, the hon. Gentleman has made a very good start with this debate. We welcome his input and I look forward to continuing the discussion with him.

Question put and agreed to.

Sitting adjourned.